A well respected, award winning social enterprise
Volunteer run - Government and charity funded
We help 50,000 people a year through divorce

01202 805020

Lines open: Monday to Friday 9am-5pm
Call for FREE expert advice & service info


What are we each entitled to in our divorce settlement?

What does the law say about how to split the house, how to share pensions and other assets, and how much maintenance is payable.

What steps can we take to reach a fair agreement?

The four basic steps to reaching an agreement on divorce finances are: disclosure, getting advice, negotiating and implementing a Consent Order.

What is a Consent Order and why do we need one?

A Consent Order is a legally binding document that finalises a divorcing couple's agreement on property, pensions and other assets.


Do you need help sorting out a fair financial settlement?

Our consultant service offers expert advice and support to help you reach agreement on a fair financial settlement quickly, and for less than a quarter of the cost of using a traditional high street solicitor.


ACTUARY REPORT

  • NE0
  • NE0's Avatar
  • Premium Member
  • Premium Member
More
27 Nov 07 #7859 by NE0
Reply from NE0
Hi Maggie
I tried to get a picture updated so you could see that I may be a fallen angel, but it exceeded the size limit!! Some on this site would have you believe I am a vile and cunning creature aiming to prey on the emotionally distraught however if I can spread a little cheer and joy at any time of year that that would be great!
So if I understand things correctly you are divorced, got your DA and a pension sharing order. You have sent this off to the trustees of your ex’s scheme and they have lost it? And to boot changed pension scheme trustees? Well some good news here is that the existing Trustee can only be dismissed if another one agrees to take their place so the scheme has to have one in place at all times, we just have to find them!

The other good news is that they have a strict timescale that they have to abide too once they have acknowledged that they have everything they need to implement the order so if we can satisfy that then they have up to 4 months to comply otherwise the scheme is fined and the individual Trustees face a fine as well.

So step one I would say is contact your lawyer and obtain a copy of the order and any other paperwork relating to the pension scheme i.e. CETV and other papers. These usually have a list of everything the Trustee needs in order to act on the order. See the plan, give them what they need and then you’re back in control!
Oh yes don't forget to send it by recorded post so they can’t claim “it never got here”

Now as for Defined Benefit (DP ) pension schemes, also known as Final Salary schemes well these do come in all shapes and sizes but the ones that tend to only offer Shadow membership as NHS, Local Government Schemes, Teachers schemes and Armed Forces Schemes. There are others but I hope you see the type I am referring too. The reason why they offer shadow membership is that they don't actually have the cash resources to pay out large amounts of pension sharing credits. These types of pension schemes rely upon the members of today paying into them so that the pensioners of today get their pension incomes paid out.

If you are offered Shadow Membership then you slip inside the nice warm and cozy pension scheme and become a member in your very own right. This means that your pension benefit will rise in line with the schemes rules, helping to keep its spending power so that when you actually retire you can buy the same goods and services as you can today. Perhaps a fact that may be overlooked (watch out lawyers) is that as a shadow member you are subject to the pension scheme’s normal retirement age which could well mean you have to wait until 65 to receive your pension benefit. Even if your ex takes early retirement you are still subject to the scheme rules.

You would have an entitlement to take up to 25% tax free cash from the pension at retirement and the rest paid out to you as a taxable income.

So I hope that this helps a little. If you could let me know the actual pension scheme then I may well be able to obtain confirmation that a shadow membership option exists/is the only option and also I may be able to get the current trustees name and address for you. Can’t promise anything you understand but if you believe in Father Christmas you never know what may appear under your tree!

  • TMax
  • TMax's Avatar
  • Platinum Member
  • Platinum Member
More
27 Nov 07 #7879 by TMax
Reply from TMax
Thanks Neo

No :-)X has signed to say happy with full settlement of share doesnt want pension. Vanished for a few years after getting settlement in 2004, it never got to court becasue X never showed up till 2006 now come back insisting on my pension, because X says didnt know what she was doing due to depression, alcoholism. lots of lies being told and each time I prove it wrong another lie comes up or sorry I cant relate to this IM not well. Mmmm am I a Cynical about it all? you can bet heheheh :-)

  • NE0
  • NE0's Avatar
  • Premium Member
  • Premium Member
More
27 Nov 07 #7887 by NE0
Reply from NE0
Hi SK Max are you related to Maggie or am I showing my Newby lack of understanding over the threads?
In your last post you talk of reaching an agreement but then not going to court, this seems to really suck as I have a client who separated over 30 years ago then in his 60s his ex decides to get divorced and takes large portion out of his house, after 30 years!!! I was fuming for the poor guy.
Are you over 50? There may be options open to you, if its realy you in the photo then I think your under 50!!

  • TMax
  • TMax's Avatar
  • Platinum Member
  • Platinum Member
More
27 Nov 07 #7917 by TMax
Reply from TMax
59 to be eact NEO hehe but thanks for the compliment. no not me in the photo but I do wear a kilt on special occasions :-)when Div is over and done Ill put my own pic in, :-)tho it was in at one time but due to scare from sols of talking to people about my divorce that have nothing to do with them outside of court and told that it will be told to the judge as a black mark one has to watch it now :-)tho my attitiude is wrongly SFW heheheh

  • maggie
  • maggie's Avatar
  • Platinum Member
  • Platinum Member
More
28 Nov 07 #7944 by maggie
Reply from maggie
Thanks for information Neo
Can you tell me whether a share of a Defined Benefit scheme offering "shadow membership" would always give a better pension income than a money purchase deal?
How would you know prior to the pension sharing Order that the scheme intended to offer "shadow membership" to the ex-spouse?

  • NE0
  • NE0's Avatar
  • Premium Member
  • Premium Member
More
28 Nov 07 #7949 by NE0
Reply from NE0
Hi Maggie
Your second question is the easier one to answer so being a boy I am going for that one first!
When you obtain the CETV the scheme would usually state at this point if Shadow Membership was either the only option i.e. NHS scheme as an example or an option alongside a pension credit to the member’s ex to be taken out of the scheme.
Now as to which is best mmmm that would really stir up a great debate but I would suggest that a good quality Defined Benefits (DB.) or Final Salary (FS) scheme would give most clients the greatest peace of mind up to and into retirement. This is because the Scheme and ultimately the employer takes on the investment or funding risk and also the annuity risk. Both of these parameters fluctuate over time and as such make a Money Purchase pension more of a risk. But not all FS or DB schemes are well funded by the Employer and can in a worst case scenario apply to the Pension Protection Fund if they can’t meet their commitments. So there is a risk still with these arrangements.
This said you can do more with a Money Purchase scheme, you have control over its investment you can choose to invest in Ethical funds for example you can also use it for some very sophisticated planning via a Self Invested Personal Pension (SIPP.) especially if you run your own company or hold commercial properties or land (definitely another topic in its own right)
Perhaps the greatest benefit of the MP option is the control over taking the benefits. The changes to pension legislation allow for benefits to be taken from age 50 at the moment. This will change to 55 in 2010 and is likely (in my opinion) to rise in the future as the government tries to solve the problem of an ageing population)
Up to 25% of the fund can be taken as Tax Free Cash and now it is possible to vary to income from the remaining part from nothing up to a Government set maximum. This used to be known as a Drawdown Plan but because we thought everyone had just gotten used to the names the industry (lead by that good old government decided to change the names) and it’s now known as Unsecured Income Withdrawal …. Far more catchy!!
There is a quirk in the legislation regarding Protected Rights funds but once again I am heading off topic so may save that one for another thread.
Hope this helps a little

  • Peter@BDM
  • Peter@BDM's Avatar
  • Platinum Member
  • Platinum Member
More
28 Nov 07 #7954 by Peter@BDM
Reply from Peter@BDM
Maggie & Neo

I hope that you don’t mind if I add my halfpenny worth here.

Neo makes several very good points about the advantages of being in a defined benefit scheme. The big elephant in the room is how you get there. Let’s assume that the CETV is a) unfair, and b) reduced by the scheme’s current underfunding position. If you leave the pension alone, neither of these matter, because the pension holder is still likely to get the benefits s/he was expecting – OK there is a risk that the underfunding will never be rectified but that’s a whole new all game. If you make a pension sharing order, you effectively crystallise the difference between a fair value of the pension and the (adjusted) CETV. Result, the pension credit member looses out.

And the alternative, possibly offsetting the fair value of the pension against other assets. OK, if there aren’t any other sizable assets this is a problem, but it is an option that should be considered.

All problems and no clear answers me. I guess that’s why I don’t give advice!

Moderators: wikivorce teamrubytuesdaydukeyhadenoughnowTetsSheziLinda SheridanForsetiMitchumWhiteRoseLostboy67WYSPECIALBubblegum11